Aha, there we go. 11 o'clock. We can get going. So, thanks very much for everybody for tuning in. As we've said before, a lot to get through this morning. So, I shall crack on. There's my bits of news that I pulled out. Saba again, very boring. Anatole, some surprises this morning. And GreenCoat Renewables. So, Saba first.
So SAR came out on the 2nd of March and said it would have offered to pay for all the costs of the tender, including the stamp duty. This has never happened before. It's something that Winterflood, who is their broker, actually made that point. So we sort of ran some numbers thinking about what would happen if you bought back all of Saba's stock and another 10% of the capital, and we came up with something like it cost about three and a half million pounds that Saba is suggesting Impax Asset Management would have to pay.
I really hate this idea. Obviously, from a shareholder's point of view, if you want to cash in, it's great because you get a tiny bit more money, but it's marginal in the scheme of things. But much to the point, it means that if a board wants to get a tender done, it has to go cap in hand to the manager saying, 'Please, you fund this.' This is not the way these things normally work. This is a board's decision.
So, there's no way a board can compel a manager to do this. And why would any manager pay to lose management fees? And then obviously, if Impax do give in, does it set a precedent for everybody else? So I really don't like the idea. Yeah, you can squeeze a tiny bit more money out of it if you go down this route, but I can't see the logic of it and I don't think really it should happen.
Now, one of the good things that happened, so Herald, if you remember last week, was saying, 'We'd like the FCA to make a ruling on this idea that you can just put your own directors in and get them to award your management contract.' And this is all kind of around the related party rules. And the FCA said this week, 'We're going to be looking at the listing rules anyway with regards to investment entities, so things like investment companies.' Their main angle was to make it easier for an investment company to have a concentrated portfolio because part of the rule at the moment is it's got to be diversified. So you could have things like single asset portfolios, like an investment company that just holds one property, for example, or one solar farm or something. So that would be quite interesting if they do do that. But part of that consultation is also going to look at this thing about the related party rules. And it could fix this issue to stop SAR basically trying to take assets under management by putting its own people in and then controlling what happens next. It's going to take a while to do. The FCA always does that. It's always a while. So they're saying basically we'll do a consultation paper by sort of probably later on this year and then complete by the end of the year. So we'll just have to wait and see what happens.
Anatole Technology, they've announced that they've taken a stake in that. So here is the share price and those are the performance numbers. Pretty impressive. I'm sure you agree. So 24.38% a year because we always show these things annualized. That's 786% return over 10 years. Now put that in the context of a 10% discount. It doesn't make sense to me anyway that the Anatole Technology discount is wide and it always seems to be wide. Doesn't really make sense, especially because these are large liquid stocks. And so you can see the argument for why they want Saba to narrow, but I cannot imagine any other shareholder other than Saba agitating for something big and corporate to happen to Technology on the grounds of closing a 10% discount when it's made you that much money over that long, you know, over that time period. It doesn't make any sense to me at all. And I just think that, well, they might just ignore it, but they might just buy back a few more shares. We'll have to wait and see.
Amedeo quickly. It's a plane leasing company. It's not massive, so we'll probably skip through it, but it has been bid for this morning. And it's a big discount to the NAV again. So, it's a big premium to the closing price, but a 32% discount to the NAV, 73p, all in cash. It's a Qatari bank called Ahli Bank. They're probably not pronouncing that right, but there we go. It's got a bigger portfolio than most of the old Doric Nimrod funds did. So, it's got six Airbus A380s now, two Boeing 777s.
They're leased to Emirates and the leases of those are starting to come to an end. It's got four Airbus A350s that lease to Thai Airways. They run for 18 years, so they've still got a while to go. Thai Airways, well, everything struggling in COVID as we know. Thai has only really just come out of its rehabilitation, effectively, which was like a Chapter 11 type or bankruptcy type situation. So, you know, that's kind of got back to normal. All of these things sort of funded by amortizing debt. So the debt's kind of running down as we get to the end of the lease lives. So these things are getting sort of safer and safer, if you like. And we've seen Emirates buy A380s from Doric at the end of their lease life. So, you know, there's like an endgame here. So the discount was probably way too wide anyway. But they were conscious of the discount. They did a strategic review. Buyers came out of the woodwork, including Leaseurope, but the numbers weren't right. They didn't add up. This time around they've improved the offer and the board's minded to accept it. They've got support from another 19.5%, but it does need 75% approval. So normally, as we had a similar situation before last week, a big discount like that, I'd be saying hold out for more, but this is a big... we've got this Iran war going on and the planes aren't flying. And we really don't know how long this is going to go on for. So Emirates and people could be badly affected by this, in which case you start to question whether they still need to buy the planes off you and that sort of thing. So maybe you just want to say, yes, somebody else can look after this now.
Lastly, GreenCoat Renewables, big discount again. And really what we're talking about is that tiny little uptick in the share price there, which looks tidy on this graph but wasn't obviously tidy in the context of the current share price. Not a great set of results that came out yesterday. The big fall on the NAV, obviously this has all been flagged already. Cash generation falls quite sharply. That's mainly down to power prices and below-budget generation. It is still a covered dividend though, but the dividend cover has fallen quite sharply, 1.9 times to 1.5 times. And because they're conscious of the need to address the discount and need to conserve cash, they're not raising the dividend again for 2026. So they're keeping it at 6.81 cents. So what they've announced yesterday is a big disposal program. They have been selling stuff already, but this is now like a targeted size over 18 months. Trying to get the gearing down because the gearing was too high, down from 52 down to 45. They're going to buy back shares as well. So they will make some investments, but they're really kind of marginal. So I do think this is all good news. It should help a bit, but we kind of need to see more encouraging news around power prices and what's going to happen, I suppose, to the wind feed-in thing because that seems to be a persistent problem. So yeah, we'll have to wait and see on that. So that's all I want to say. I'm now going to bring in Andrew and we're going to hear what he has to say about what happened over the course of February.
Lovely. Thank you very much indeed, James. I will indeed have a romp through what happened over the last month. Quite an interesting market period, of course. So let's have a look at exactly what's been going on. I'll start this time actually with a look at the investment trust sector broadly to see how it has performed against the FTSE All-World index. Now, this is a two-month chart that shows you the performance of the investment trust sector in black against the FTSE All-World in blue. And you can see actually there's not been a great divergence during this very difficult market period. And I think that's quite interesting because initially you may feel that the investment trust sector might have resisted this downturn a little better because it does have many conservative elements. There are quite a number of income-focused trusts. There are alternative assets. There are uncorrelated funds. There are those that are protecting wealth. So you might have felt actually that it would have done a bit better. But of course there are some countervailing factors here as well. Notably, of course, that there is gearing involved in the investment trust industry and it's always a useful reminder to know that that works in both directions. So on the way down that can be a little bit harmful. And the other thing that's happened is there has been a little bit of a widening of the average discount. I've written here that it has come out to 14.1%.
I checked that again this morning and it's out to about 15%. So I think this is again quite normal during a sell-off, during a risk-off period. So nothing to concern me here, but it's just quite interesting that the investment trust sector is moving pretty much in parallel with global equities at this time. So let's see what exactly has been moving. And again, I think you may be slightly surprised that these figures are not more dramatic. And my feeling is that this dramatic geopolitical overlay that we've had has actually served to dampen the impact of news from individual trusts because rather than individual trusts signaling to the market that something dramatic is going on, I think more broadly it's been that everything has been moving by a smaller amount. Nevertheless, there are some interesting individual movements here. Baker Steel Resources Trust at the top because we've seen the rally in commodity prices continuing. Of course, the gold price has risen on this latest drama that we're having in the Middle East. And Baker Steel is interesting as well because there's a lot of moving parts in that portfolio. A lot of specific news there. Tungsten West is a really interesting part of that. And the trust itself is still on a discount in the low 20s. So I think there could be a bit more to go for there. Let's have a look and see exactly what's interesting. I'll be talking about three of these: Augmentum Fintech, Seraphim Space, and Baillie Gifford Shin Nippon. All of those have moved quite significantly over the last month, and on the way down. Similarly, I think actually these falls are relatively muted, dominated by a few special situations. I don't think there's really any great underlying theme here. So I'm just going to pick out Chrysalis to talk about again, as I did last month. So I'll whiz through these things quite quickly.
Augmentum Fintech first of all. Now, I know James covered this when the bid occurred, but effectively, this has now received a bid of 111p per share in cash. The shares are trading just below that. So they're not really indicating they're expecting anything else to happen. And I think this is just worth talking about for a moment because I think back and I remember how shocked we were back in the summer of 2023 when Civitas Social Housing received a bid that was at a 26.7% discount to its NAV. And we thought at the time that this was completely unreasonable and unrealistic because the NAV at that time, I think in our minds, was quite sacrosanct and that was the price we would always aim to get to. But I think now we've had to make a mental adjustment and we've come to realize that the net asset value is there as a guide for us with these alternative asset trusts and actually it's not a magic number and no one's going to necessarily pay that when it comes to a takeover. And I think it's just a measure of the current market conditions that actually buyers are not queuing up for Augmentum Fintech. And that's just the reality. This may well be the best price you're going to get. And I think it's a bit naive of us to expect a payment of the full 159.12p of asset value. But that being said, my feeling is that this 30% discount is really very distinctly ungenerous and it does seem to me that that discount is a bit too wide for a trust that has fundamentally done perfectly well. You know, this has not been a disaster. This is not a Digital 9 Infrastructure. It's not a Home Reit. Actually, Augmentum Fintech has gained in value over the years. It does have some very interesting holdings that could do extremely well if the IPO market really gets going in the US later this year. So I think it's a bit of a disappointing outcome so far. We will see if another bidder emerges, but it doesn't really look very likely at this stage.
Another trust that I talk about quite a lot, and I think for any really engaged investment trust investor, it's a must really to be following this trust closely, is Seraphim Space. It's been such an exciting ride, upwards anyway. I mean, it wasn't so exciting when it was going down, but actually this is a volatile share price and it's often actually quite reactive to world events. At the present time, I think there's a bit of a two-way pull on the price because clearly there's a good bull case to be made now for Seraphim Space defense capabilities. It has holdings in a lot of companies that in particular have very sophisticated satellite systems that are used by military organizations now. And I think there's a strong case actually for defense spending to continue to be a really strong driver of these companies' valuations. But the bear case is of course that, you know, these are long-duration assets, not necessarily that profitable at the moment, although they are moving into some nice profits, and this is a risk-off market. So this kind of risk asset often suffers and we have seen Seraphim Space actually being quite volatile. So whilst it's up on balance over the month, actually it has come down in the last week or so and that's despite some quite impressive interim results for the second half of 2025 which showed the NAV up just over 20%. Some excellent gains across the portfolio. One thing I did note in the announcement was the performance fee provision of 7p per share. Now, performance fees are such an interesting topic. We could do a whole show on that I think, because actually most investors in my experience seem quite happy with the concept of performance fees and they understand that they're only paid if the underlying investments have done pretty well and there's proper guarding with hurdle rates, with make-up rates and everything to make sure it's sensibly structured. But even so, people still don't like it when the performance fee is actually paid or accrued. And in this case, it's 7p per share, which is quite significant. So, you know, well done to the managers of Seraphim Space for earning that. And we'll see actually if investors are prepared to swallow that when it comes to pass. I do think there'll be more volatility here. So, definitely one to watch. And one thing that I think may well happen is that if the shares come back to a premium to the asset value, because they're currently just at a small discount, if they come back to a premium, I think we may well see some fundraising here. There's a great deal of demand for what Seraphim Space is doing. And the managers have just raised over $100 million for another fund of theirs. So I think they would like to expand the investment trust and that would be such a wonderful thing I think for us to see. We haven't seen much of that going on. So let's hope they get back to a premium and raise some fresh money.
A trust that hasn't been doing so well is Baillie Gifford Shin Nippon. And this trust has just been through a tender offer which was up to 15% of the share capital and it was well oversubscribed. I think about half of the shares were tendered. And I think, you know, it's interesting to think about how you read that because critics of the trust will undoubtedly take that as extra firepower to say, well, shareholders are clearly indicating they're unhappy with current management. But that's not how I read it actually because I think it's just rational when you're getting an uplift through a tender to make sure that you do tender your shares. You have a fiduciary duty to do that in many cases. So I'm not sure the tender offer was indicating too much, but it did trigger me actually to take a fresh look at the track record and actually at the figures for the one, three, and five-year performance. And you can see from the slide here that that's quite interesting because over three years, Baillie Gifford Shin Nippon still looks absolutely atrocious and it's been a massive underperformer. But if you look over the last one year, it's really come back quite strongly and it's not that far behind Nippon Active Value Fund and actually well ahead of AVI Japan Opportunity. And I was a little bit surprised by that. So I hadn't quite realized that Baillie Gifford Shin Nippon had stormed back so strongly. So that's one I'll be taking a fresh look at actually and I think that's quite interesting.
Just quickly now on the way down, I'm just revisiting this really because you'll probably remember I talked about this a month ago and in particular how Chrysalis Investments had been squashed a little bit by the performance of Klarna post-IPO in the US. You remember there was a big build-up to Klarna finally getting its IPO which happened in November and it's been a complete disaster since that time. So it wasn't November, it was slightly earlier, but you can see from this chart here which is the Klarna share price that it's been really awful and actually had another leg down during February. So that's been bad news for Chrysalis Investments and I think it's contributing to what I feel is something of a bad smell around the trust actually, that it's just in an unfortunate spot at the moment because of course there's this significant disagreement between the board and the manager because the board now wants to wind the trust down, stop making new investments and to bring the management in-house to save money. And of course the existing managers tend not to think that's a very good idea. And their argument is that actually they have really specific expertise and deep knowledge of these companies that it's required to maximize that value for shareholders even in the event of a wind-down. So there's been a war of words there and the vote on what comes next is happening at the EGM on 24th of March. So if you are a shareholder, please do vote. We'll see what happens. And my feeling is that actually investors really need some clarity here over exactly what's going to happen next. So possibly once that vote is out of the way, we might see things settle down a little bit and maybe Chrysalis will start to look a little bit better.
Okay, that's it for me. That's my run through the news. So I'll hand over to Gavin now to have a talk with Nick.
Next segment. If you joined us to watch Nick Train, thank you for waiting. We're about to meet our guest. Nick Train has managed Finsbury Growth and Income for 25 years. The investment trust itself is a hundred years old. A history written recently by John Newlands shows the trust has delivered total shareholder return almost double that of the FTSE All-Share over Nick Train's tenure. And in fact, 17 out of his first 20 years he beat the index. The last five years, however, have been more difficult for his style and more recently performance has been challenged by artificial intelligence concerns over the competitive impact from the new technology, which I'm glad to say he's here to talk to us about today. So after his presentation I'll ask the fund manager some questions. If you have any questions to put to him, please type them into the chat box on YouTube and I'll put them to Nick afterwards. But in the meantime, good morning, Nick.
Thank you for being with us.
I think that's a pleasure. Well, it is a pleasure.
In your own time, take it away, please.
Can I do that? Because Gavin, thank you for the introduction and it really is so pertinent right now. So, you know, what am I doing here? You know, it's a good question. Because, you know, in the end, I am a UK equity, not a tech guy. And, you know, candidly, my reputation, such as it is, has been based certainly over the last quarter of a century on investing in, I don't know, Irn-Bru and Dove soap. And actually I might even stop for a second and double down on that reputation and just observe. Irn-Bru and Dove soap are nicely profitable brands that are still growing nicely and one shouldn't dismiss assets such as those during a period of tech disruption and maybe stock market disruption as well. But anyway, notwithstanding that reputation, Gavin, as you say, I do want to talk about artificial intelligence.
What gives me the right to do that? Well, in a sense, I feel I have absolutely no alternative but to have a view on AI. And the reason for that is illustrated on the slide that's up on the screen right now because Finsbury Growth and Income Trust under our tenure has not only been invested in fizzy drinks and soap. We've also had multi-year, I might even say actually multi-decade holdings in London-listed world-class data companies and those investments have done really exceptionally well up until really rather recently. And back in 2023, somewhat informed by that experience, and you know, like everybody else scratching our heads trying to work out what AI means, I took a fateful decision. And that decision was to not only retain our world-class London-listed data companies, but to actually add to the holdings and indeed to initiate a number of other holdings in contiguous areas. And the result is, as you can see from this slide, that today over half of Finsbury's portfolio is exposed to data platform, software-type businesses. And I said that that had been a fateful decision and it was so because, as you've mentioned and as is painfully, painfully apparent, this has been a torrid nine months for the share prices of these types of business. The concern is that they are being disintermediated or will be disintermediated by artificial intelligence. Now, not only have the share prices fallen, their valuations have cratered as well. And the reason for that, as you can see on this slide, is that actually the companies have continued to grow steadily through 2025 and are forecast to continue growing steadily into 2026 and beyond.
And what I want to do now with this session is I want to mount a defense of this half of Finsbury's portfolio. I want to explore the defensibility of these data franchises and I think that there are kind of four arguments for the defense, as it were. The first, going to the next slide, is a conceptual one. Here is a model of the AI phenomenon. And just to give credit where it's due, this is a model that's proposed by David Schwimmer, the chief executive of London Stock Exchange Group. And what David Schwimmer says is you can fruitfully think about AI as being made up of three components. There's the incredible requirement for computing power. There are the large language models themselves competing against each other for efficacy and attention. And then you have the data. Now, of course, David Schwimmer is talking his own book, but I do think it's worth just considering Schwimmer's arguments because what he says is that those companies that own truly proprietary data are in a privileged position within this framework. And they're in a privileged position because they can piggyback. They can piggyback off the billions and trillions that are being invested in the models and in the computing power. They can piggyback off that to derive new insights from their proprietary data. And Schwimmer argues that those new insights are going to be even more valuable than ever. Now listen, I don't know whether you agree or not with that model. Does it map to the real world? That's the critical question. But I think let's just go to the next slide and just consider it from the perspective of London Stock Exchange Group itself because this is an important holding within Finsbury Growth and Income Trust. And what we think is that the developments in London Stock Exchange Group's business, including its very reassuring set of results about 10 days ago, but more particularly the announcement of partnerships that LSEG has been able to bring to investors' attention. We think that those developments go a long way to confirming the company's proposition about itself, which is that what LSEG says about itself is that it has the best data estate in its industry. And I think in particular it's the sight of LSEG doing multi-year, enterprise-wide deals with truly substantive global financial institutions for its data and its data and analytics. That's so reassuring. I've just got a quote here from Bank of America who just over a fortnight ago signed one of these multi-year, enterprise-wide deals with LSEG. And this comment from Bank of America that it values the unified and governed nature of LSEG's intelligence. To us, that's a big approbation of David Schwimmer's mental model for AI, but also of LSEG's position within the AI ecosystem.
Let's go on to the next slide. And the second argument in the defense of these data businesses, and the second argument is kind of an appeal to history. Over the last 30 years, data has been digitized as a result of the internet, and that digitization of all of that data has increased the value of the data.
to its users and it's also materially improved the profitability and the value of the data owners. That much is absolutely incontrovertible. So the proposition is: why should AI be any different? Why shouldn't AI simply be a further enhancement of the value of the data that these companies own? Now, I think that argument is represented in the quote at the top of this slide, but that's another quote from Schwimmer and I've spoken enough about him. So let me just put this from the perspective of another really major Finsbury shareholding, which is Experian.
Now, in December, Brian Cassin, the CEO of Experian, addressed an investor conference. And at that conference, he noted that over 20 of the 25 largest US financial institutions, over 20 of them are currently customers for Experian data and software services. And Cassin claimed at that conference that Experian's services are as critical to those US banks, they are as critical to those banks' day-to-day operations as the services of Microsoft.
Now, that's a big claim, isn't it? That Experian's services are as sticky and hence as valuable as even Microsoft's. But think further, because Experian's software services are built on its proprietary database, and Experian's proprietary data is essentially confidential. It's private. It is just not accessible on the public internet. It truly is a defensible proprietary database. So, wouldn't Brian Cassin be justified in saying that people could look up stuff on the internet before Claude? But that hasn't meant that the internet took away Experian's franchise. And indeed, we can't really see how Claude could even begin to take away Experian's franchise.
Now, you might say to me, Nick, you just don't get it. AI is just too big. It's too disruptive. You just don't know what Anthropic is going to be able to do in a couple of years' time. And listen, I acknowledge the force of that counterargument, and there is no silver bullet that I can give you to totally reassure you that the companies won't be disintermediated. Nonetheless, let's just go to the next slide. Nonetheless, I do think we are warranted, I think we're warranted to look at what these strong businesses, we are invested in some very, very strong businesses here. It's worth looking at what these companies have been and continue to do with AI tools themselves in order to strengthen their own business franchises.
So for instance, Rightmove. Could ChatGPT conceptually take away Rightmove's listing business? I suppose it's not impossible if Rightmove took no kind of defensive action. But to that point, isn't it reassuring that a fortnight ago, Rightmove announced the launch of its own conversational search tool? This is a tool that will help visitors to Rightmove in their real estate journey, just like ChatGPT can do. And isn't it also intriguing that Rightmove would have developed this conversational tool in collaboration with Google Cloud, and it's a tool that's actually using Google Gemini's models?
So, shouldn't we ask: by what right is ChatGPT going to take away Rightmove's franchise? Rightmove now has its own conversational search tool. Rightmove has all of the inventory. Rightmove has all of the interaction with that inventory. 89% of all time spent is spent on Rightmove. That interaction creates just extraordinary amounts of data. What is it? The company sent 69 billion, I had to check the billion, not the million, 69 billion signals to estate agents last year alerting them to hits on their listed properties. Rightmove has all of the trust, and Rightmove's free.
You know, those seem to us to be very defensible characteristics of that extraordinary franchise. Now, in the interest of time, let's just go to my final slide.
So listen, I've argued in defense of these investments that we have that, from a conceptual point of view, proprietary data is actually becoming more valuable as a result of AI. I've noted that in the past, over previous technology waves, these data businesses have actually made themselves more valuable through those previous cycles. I've noted that all of the companies, the strong companies, have got their own AI strategies that are credible.
And then I have a final point. And that final point is: this debate just seems to be couched so negatively. It's all about the threat. It's all about existential worries about disintermediation. Actually, when you talk to the companies, they're excited. They see that AI is an enormous boost to their businesses. And well, let's hope they're right. I've put a quote here from the chairman of Sage: AI is an extraordinary tailwind.
Now, I get that as a software company, maybe Sage is more vulnerable than a pure data company, but I have to say of all of the investments that we've shown you in Finsbury's portfolio this morning, Sage is the one with the clearest acceleration in its revenue growth rate as a result of it delivering AI-enhanced efficiencies to its millions of captive customers.
And just on this point about the opportunity ahead for these businesses, I might just end with an anecdote, if you'll permit me. And it's an anecdote from Eric Enström, who is the chief executive of RELX, another major holding within Finsbury. And we met with Enström at the back end of last summer and we asked him to scope out the scale of the opportunity that RELX sees for its business as a result of AI.
And what he said to us is, he said, think about it like this. He said, 20 years ago, RELX's risk division represented, in his opinion, 2%, only 2% of the overall value of the whole company. 20 years later, RELX's risk division, which Enström described to us as effectively an AI business. Today, that risk division is machine-to-machine, it's big data, it's LLMs, its growth recently has been driven by the application of AI to its data sets. It's effectively an AI division.
Today, Enström pointed out, RELX's risk division is worth, in his opinion, half the value of the overall company. So, from 2% of the business to 50% of the business, that's a lot of growth. And by the way, the rest of RELX was growing steadily over that 20-year period as well. But here's the thing. Enström says that that risk division is growing as quickly today as ever before and that its TAM, its total addressable market, is greater than ever before.
Now, over the last 20 years, through to summer of 2025, RELX's share price was up over sixfold as a result of this strong underlying growth. Even after the setback that we've acknowledged, RELX has still quadrupled over the last 20 years. And you may say I'm too optimistic. Maybe I'm an optimist to a fault. But I don't see any reason why RELX shouldn't continue to grow and why its share price shouldn't continue to deliver the same sort of extraordinarily attractive returns that it has in the past.
And I will just say, just to remind you, that 50% of Finsbury's portfolio is exposed to these companies. That has been painful for shareholders over the last 12 months. I apologize for that. But we have the investments still, and if the companies are right and if we are right, we could make a lot of money for investors out of this idea. Gavin, thank you for listening to me. Thank you for anybody still here listening to me.
Oh, there's plenty of people. Don't you worry, Nick. Quite a few questions have been coming through as you were speaking. I'll start with those. But do send more in if you're watching and have got a question. But you've made a powerful case for the strong underlying performance of these businesses. But we've got viewers who are wondering, I'll put two questions together here because they're kind of similar. One viewer is asking: these data holdings may well come right. However, did you have a blind spot to the risk and extent of disruption that might happen before the value that you see comes through? And another question asking something similar: why did you not think that these data analytics companies would be hit by the AI threat?
Well, these are fair questions and it's a disappointing and uncomfortable position that we find ourselves in today. There's no escaping that. But I think my argument is that we believed then and we still believe that proprietary data that isn't accessible to general models retains significant, indeed increasing, value. And we also note that the companies have not been sitting on their hands. They have for a number of years been deploying AI technology within their businesses. And it's evident that they are successful in that strategy because we can see stickier customers and improving profitability.
And listen, I accept that we can't be certain what is going to happen in two years' time. But when you look at the results today and when you look and examine the commentary of the executives about the companies, there is no sign of disintermediation to date. There just isn't. If anything, there is strong confirmation that the companies are winning from AI. So I would say at the moment it is a pure sentiment-driven derating of these businesses, and sentiment can turn.
RELX's share price is up 30% from its lows since its results, where it was able to point out that it is actually joint venturing with Anthropic. LSEG has had a big rally recently as the company, I think, has really been able to reinforce just how impossible it would be for AI agents to replicate the breadth of its data and the trusted nature of its data.
Why do you think markets have been so skeptical then about what these companies are saying? Have these holdings let down shareholders before in terms of their forecasts or comments about the future?
You know, I said at the outset that we've had very long-standing holdings in London Stock Exchange Group, in RELX, in Sage, and these businesses have successfully negotiated technology cycles in the past and emerged on the other side of those cycles stronger and more profitable than before. If you were simply relying on an appeal to history, then I think you would have a high degree of confidence that these companies will be much more profitable and much bigger businesses in five years' time.
I do accept that AI does feel different. You know, it is an extraordinary technology and I think it's more just a sense of we don't know what it's going to be able to do in two years' time and therefore better be safe than sorry. As I say, we are where we are. There is no evidence as yet of anything except the companies prospering as a result of this new technology. And the upside, if they're right and we're right, is very, very significant. So that's where we stand currently.
I guess the problem is, I think Morgan Stanley, or was it, no, Goldman Sachs mentioned this in a note recently, that it's perhaps difficult to disprove these fears. And with so much volatility and uncertainty in the world, perhaps investors are particularly rattled at the moment and are willing to believe. I mean, there was one piece of research from Citron Research, I think in New York, which kind of got meme status. I don't know, did you read that?
Yeah, I mean, that was taking a dystopian sort of look at the near future in 2028. What did you think of that report?
I thought it was stimulating. I thought that the central message was that, as has been the case for the last 30 years, developments in new technology tend to be highly deflationary for economies because the price finding and the efficiencies reduce the costs of products and services. That suppression of inflation actually brings significant benefits to capital markets because it tends to reduce long-term bond yields.
I'm not a macroeconomist, but from a microeconomic perspective, it seems pretty clear to us that inflation, particularly for services, will be falling over the next few years and that should be a big boost to bond markets and for growth companies. There is nothing in the Citron report that argues against the core proposition that we adhere to, which is that if you own an aggregate of data that's not accessible to large-scale general LLMs, you're in a privileged position.
If anything, as Schwimmer argues, truly proprietary data, and I believe our companies possess that, are in an even stronger position.
